Hermès Surpasses LVMH | A Testament to Focused Luxury and Long-Term Vision

Hermès has overtaken LVMH to become the world’s most valuable luxury company, despite reporting a slowdown in Q1 2025 sales due to weaker demand in China. While Hermès posted 7% organic revenue growth—below analysts’ expectations of 8.8%—its focused single-brand model, exclusivity, and strong pricing power have helped it outperform broader industry headwinds. In contrast, LVMH saw a 5% decline in fashion and leather goods sales, pushing its market cap below Hermès.

The divergence also reflects differing investor sentiment: Hermès trades at a significantly higher P/E ratio (~53.7) versus LVMH (~20.3), signaling long-term confidence in Hermès’ brand strategy. While the luxury sector faces mounting challenges from economic uncertainty and tariffs, Hermès’ resilience underscores the strength of a concentrated, brand-led approach.

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